This opinion is subject to revision before final

publication in the Pacific Reporter

2015 UT 63

IN THE

SUPREME COURT OF THE STATE OF UTAH

DAVID K. PANG,

Appellant,

v.

INTERNATIONAL DOCUMENT SERVICES; PROGRESSIVE FINANCE; and 

MANAGEMENT INCORPORATED,

Appellees.

No. 20120983

Filed: August 5, 2015

Third District, Salt Lake

The Honorable William W. Barrett

No. 120904043

Attorneys:

David K. Pang, Salt Lake City, appellant pro se

Jason Boren, Karen M. Clemes, and Tyler Hawkins, Salt Lake City, 

for appellees

CHIEF JUSTICE DURRANT authored the opinion of the Court in which 

ASSOCIATE CHIEF JUSTICE LEE, JUSTICE DURHAM, JUSTICE PARRISH, and 

JUDGE BLANCH joined.

JUSTICE NEHRING did not participate herein due to his retirement; 

THIRD DISTRICT COURT JUDGE JAMES T. BLANCH sat.

JUSTICE DENO G. HIMONAS became a member of the Court on 

February 13, 2015, after oral argument in this matter, and 

accordingly did not participate.

CHIEF JUSTICE DURRANT, opinion of the Court:

Introduction

¶1 This case requires us to determine whether rule 1.13(b) of 

the Utah Rules of Professional Conduct reflects a clear and 

substantial public policy of the kind sufficient to prevent companies 

from terminating in-house legal counsel for reporting illegal activity 

to management. David K. Pang, an attorney, filed a complaint 
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2

against his employer alleging that he was terminated for refusing to 

ignore the company‘s violation of several states‘ usury laws. He 

asserted that the company had effectively asked him to violate the 

Utah Rules of Professional Conduct in order to keep his job. The 

district court dismissed his complaint, concluding that Mr. Pang was 

an at-will employee and that his firing did not violate a clear and 

substantial public policy of the State of Utah. We affirm the district 

court‘s decision. Rule 1.13(b) does not constitute a clear and 

substantial public policy that prevents the termination of an at-will 

employee. And even if it did, other rules of professional conduct 

evince strong policy choices that favor allowing clients to terminate 

the attorney-client relationship at any time, including firing an inhouse lawyer with whom an organizational client disagrees.

¶2 Mr. Pang also argues that the district court improperly 

dismissed his claims without holding an oral hearing. The Utah 

Rules of Civil Procedure require district courts to grant a litigant‘s 

request for a hearing on a dispositive motion unless the motion is 

frivolous or the issue has been authoritatively decided. We agree 

with Mr. Pang that his opposition to the motion was not frivolous 

and the issues had not been authoritatively decided, so the district 

court erred when it denied his request for a hearing. But because 

Mr. Pang has not identified any substantive argument he would 

have raised if his request had been granted, we conclude that the 

error was harmless. We note, however, that because a rule 12(b)(6) 

dismissal is generally not a judgment on the merits and the district 

court did not dismiss the complaint with prejudice, nothing in our 

decision precludes Mr. Pang from filing a new complaint.

Background

¶3 On appeal from a motion to dismiss, we must accept the 

factual allegations in the complaint as true1 and view all reasonable 

inferences from them in the light most favorable to the plaintiff.2 We 

outline the pertinent facts consistent with this standard. 

¶4 Between 2009 and 2012, Mr. Pang worked as a compliance 

officer for Internal Document Services (IDS) and Progressive 

Finance. Resource Management Incorporated (RMI) also hired Mr. 

Pang in 2012, becoming a ―co-employer‖ with the other two 

companies. IDS promoted Mr. Pang to in-house counsel in 2011, 

 

1 Hudgens v. Prosper, Inc., 2010 UT 68, ¶ 2, 243 P.3d 1275.

2 Moss. v. Parr Waddoups Brown Gee & Loveless, 2012 UT 42, ¶ 3, 

285 P.3d 1157.
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Opinion of the Court

3

making him responsible for its compliance with state regulatory 

requirements in several different jurisdictions. Mr. Pang apparently 

worked in this same capacity for the other two companies. Because 

the relationship between these three entities is not relevant to the 

merits of the issues presented on appeal, we will refer to them 

collectively as ―the Company‖ throughout this opinion.

¶5 Beginning in September 2011, Mr. Pang became concerned 

that the Company was violating ―usury laws in numerous states by 

charging an interest rate above statutory limits and not registering as 

a loan institution.‖ He warned the Company‘s owners ―repeatedly‖ 

that these oversights ―rendered their out of state practice illegal.‖ 

Mr. Pang ―made a final attempt to convince‖ the Company of its 

―illegal lending practices‖ in May 2012. He ―printed, and took home, 

loan contracts from different states in order to develop a spreadsheet 

report to show the specific number of . . . usury violations.‖ Two 

weeks later, the Company fired Mr. Pang ―for taking home 

documents,‖ citing a provision of the employee handbook that 

prohibited such conduct. ―[A]t the time of his termination,‖ Mr. 

Pang learned ―for the first time‖ that ―the owners were aware of the 

problems but did not plan to correct‖ them. And he ―was told to 

ignore‖ the Company‘s ―non-compliance.‖

¶6 According to Mr. Pang, the ―real reason‖ for his termination

was ―the fear that [he] would expose [the Company‘s] illegal 

activities, and to punish and intimidate him into silence.‖ He sued 

the Company for wrongful termination, breach of the implied 

covenant of good faith and fair dealing, and intentional infliction of 

emotional distress. With respect to the wrongful termination claim, 

Mr. Pang alleged that his termination ―violated the public policy of 

the State of Utah and the Rules of Professional Conduct‖ because the 

Company fired him for ―(1) refusing to be unethical, (2) [refusing] to 

break the law by complying with their illegal activities, [and] (3) 

refusing [the Company‘s] orders to ignore their illegalities.‖3

¶7 The Company moved to dismiss the complaint under rule 

12(b)(6) of the Utah Rules of Civil Procedure. After determining that 

a ―hearing was requested but . . . not necessary‖ to rule on the 

 

3 Mr. Pang also alleged that he had an implied contract of 

employment and was not an at-will employee. The district court 

dismissed this claim, and he has not challenged that decision on 

appeal.
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4

motion, the district court dismissed all of Mr. Pang‘s claims. He 

appeals. We have jurisdiction under Utah Code section 78A-3-102(3).

Standard of Review

¶8 Mr. Pang argues that the district court should have granted 

his request for a hearing before ruling on the motion to dismiss. 

Whether a litigant is entitled to a hearing on a dispositive motion 

under rule 7(e) of the Utah Rules of Civil Procedure is a question of 

law, which we review for correctness.4 He also argues that the 

district court improperly dismissed his wrongful termination claim 

by concluding that his termination did not violate a clear and 

substantial public policy. ―We review the grant of a motion to 

dismiss for correctness, granting no deference to the decision of the 

district court.‖5

Analysis

¶9 We first address Mr. Pang‘s contention that the district 

court erred in denying his request for a hearing. We conclude that 

even though the court erred in refusing to hold a hearing on the 

motion to dismiss, Mr. Pang has not demonstrated on appeal that the 

outcome of his case would have been any different absent the error, 

so the court‘s mistake was harmless. We then discuss Mr. Pang‘s 

wrongful termination claim and hold that he has not identified a 

clear and substantial public policy sufficient to prevent his 

termination. And even if he had, we conclude that other 

countervailing policies outweigh an in-house lawyer‘s right to 

―report up‖ illegal activity without fear of termination.

I. The District Court Should Have Held a Hearing,

but the Error Was Harmless

¶10 Rule 7(e) of the Utah Rules of Civil Procedure provides that 

the ―court shall grant a request for a hearing‖ on a dispositive 

motion unless it ―finds that the motion or opposition to the motion is 

frivolous or the issue has been authoritatively decided.‖ Mr. Pang 

requested an oral hearing in his memorandum opposing the 

Company‘s motion to dismiss. In the district court‘s written order 

dismissing the complaint, it noted that a ―hearing was requested,‖ 

but found that it was ―not necessary for the Court to decide the 

Defendants‘ Motion to Dismiss.‖

 

4 See Price v. Armour, 949 P.2d 1251, 1254 (Utah 1997).

5 Hudgens v. Prosper, Inc., 2010 UT 68, ¶ 14, 243 P.3d 1275. 
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Opinion of the Court

5

¶11 Mr. Pang contends that this was improper for two reasons: 

(1) rule 7(e) requires district courts to make explicit written findings, 

and (2) his opposition to the motion was not frivolous, nor had the 

pertinent issues been authoritatively decided, so rule 7(e) required 

the court to hold an oral hearing on the motion. We reject Mr. Pang‘s 

contention that rule 7(e) requires explicit oral or written findings, but 

we agree that in this case the court erred in denying his request for 

an oral hearing. Nevertheless, because Mr. Pang has failed to show 

that granting his request would have had any effect on the outcome 

of the case, we conclude that the error was harmless.

¶12 Nothing in the rules of civil procedure requires district 

courts to make specific written or oral findings of fact before denying 

a litigant‘s request for a hearing. Rule 7(e) provides that a district 

court ―shall grant a request for a hearing‖ on a dispositive motion 

―unless the court finds that the motion or opposition to the motion is 

frivolous or the issue has been authoritatively decided.‖6 But the 

rules also provide that a court ―need not enter findings of fact and 

conclusions of law in rulings on [non-dispositive] motions.‖7 And 

with respect to orders on dispositive motions, the rules require 

nothing more than ―a brief written statement of the ground for [the 

court‘s] decision‖ only ―when the motion is based on more than one 

ground.‖8 Here, a request for a hearing under rule 7(e) is not a 

dispositive motion, and Mr. Pang has not offered any reason why 

the ―brief statement‖ rule should apply to hearing requests or why 

such requests should be treated any differently than ordinary 

motions. We therefore conclude that rule 7(e) does not require 

district courts to enter specific findings before denying a request for 

a hearing.

¶13 Even though the court had no obligation to make explicit 

findings before refusing to hold a hearing, we agree with Mr. Pang 

that the court erred because it does not appear that his opposition to 

the Company‘s motion was ―frivolous‖ or that the pertinent issues 

had been ―authoritatively decided.‖9 We have not yet interpreted the 

terms ―frivolous‖ or ―authoritatively decided‖ in rule 7. But in other 

contexts, we have indicated that an argument is ―frivolous‖ if it is 

 

6 UTAH R. CIV. P. 7(e).

7 Id. 52(a).

8 Id.

9 See id. 7(e).
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―obviously without merit‖ or has ―no reasonable likelihood of 

success.‖10 Likewise, the Utah Rules of Appellate Procedure state 

that a frivolous appeal is ―one that is not grounded in fact, not 

warranted by existing law, or not based on a good faith argument to 

extend, modify, or reverse existing law.‖11 This is a high bar. Even 

bad arguments are not necessarily frivolous—we sanction attorneys 

for frivolous appeals only in the most ―egregious cases‖ where an 

obviously meritless appeal ―result[s] in the delay of a proper 

judgment.‖12

¶14 Mr. Pang‘s arguments before the district court do not meet 

this standard. The court acknowledged in its written order that Mr. 

Pang‘s wrongful termination claim was not completely unfounded. 

As we discuss in more detail in part II of this opinion, to withstand 

dismissal on his wrongful termination claim, Mr. Pang needed to 

allege that a clear and substantial public policy prohibited his 

firing.13 And to meet this standard, a policy must be reflected in 

sources of law that we have recognized as an authoritative statement 

of state public policy, like a judicial decision.14 Mr. Pang argued that 

the Company fired him for making an internal report of illegal 

activity as required by the Utah Rules of Professional Conduct. The 

district court acknowledged that the rules were ―[a]rguably  ̳judicial 

decisions‘‖ that could qualify as an authoritative source of state 

public policy. But the court ultimately concluded that ruling in Mr. 

Pang‘s favor would be ―acting outside its role‖ because ―there is no 

public policy that is plainly defined by legislative enactments, 

constitutional standards, or judicial decisions that apply to this 

case.‖

¶15 Thus, the court seems to concede in its order that Mr. Pang‘s 

argument was not frivolous, in that an issue of first impression that 

could ―arguably‖ go the plaintiff‘s way cannot be said to be a claim 

that is ―not warranted by existing law, or not based on a good faith 

argument to extend, modify, or reverse existing law.‖15 There are 

 

10 Redd v. Hill, 2013 UT 35, ¶ 28, 304 P.3d 861 (internal quotation 

marks omitted).

11 UTAH R. APP. P. 33(b).

12 Redd, 2013 UT 35, ¶ 28 (internal quotation marks omitted).

13 See infra II.A.

14 See infra II.A.

15 See UTAH R. APP. P. 33(b).
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Opinion of the Court

7

certainly problems with Mr. Pang‘s wrongful termination claim that 

we discuss later in this opinion. But it is difficult to see how the court 

determined that it was ―frivolous‖ or ―authoritatively decided‖ by 

existing precedent when the order dismissing the claim seems to 

acknowledge otherwise. Accordingly, we conclude that the district 

court erred in denying Mr. Pang‘s request for a hearing on the 

motion to dismiss.

¶16 But even though Mr. Pang was entitled to a hearing, that 

error alone is insufficient to justify reversal. A court‘s erroneous 

refusal to grant a requested hearing does not warrant reversal unless 

there is a ―reasonable likelihood that it affected the outcome of the 

case.‖16 For example, in Price v. Armour, we held that the erroneous 

denial of a litigant‘s request for a hearing on a motion for summary 

judgment was harmless error because the litigant failed to show 

―that he would have made new or additional arguments at the 

hearing that were not covered by his memorandum of points and 

authorities.‖17 Consequently, the litigant could not show that there 

was any reasonable likelihood that a hearing would have affected 

the outcome of the case, so reversal was not justified.18

¶17 Like the litigant in Price, Mr. Pang has not identified any 

substantive arguments he would have made at a hearing had the 

court granted him one. Instead, he asserts that he would have ―made 

an oral motion to amend his complaint‖ if, ―after oral arguments[,] 

the District Court found his Complaint still to be lacking.‖ But Mr. 

Pang overlooks the fact that he could have amended his complaint at 

any time without asking the court‘s permission. Rule 15(a) allows a 

party to ―amend his pleading once as a matter of course at any time 

before a responsive pleading is served.‖19 Here, the Company moved 

to dismiss the complaint without ever filing an answer, and under 

our caselaw, a ―motion to dismiss is not a responsive pleading.‖20

Moreover, even after the court dismissed his complaint, Mr. Pang

 

16 Price v. Armour, 949 P.2d 1251, 1255 (Utah 1997); see also UTAH 

R. CIV. P. 61 (―The court at every stage of the proceeding must 

disregard any error or defect in the proceeding which does not affect 

the substantial rights of the parties.‖). 

17 949 P.2d at 1255–56.

18 Id. 

19 UTAH R. CIV. P. 15(a).

20 Hudgens v. Prosper, Inc., 2010 UT 68, ¶ 24, 243 P.3d 1275.
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could have moved to reopen the judgment under rule 59 or rule 60 of 

the Utah Rules of Civil Procedure.21

¶18 Accordingly, Mr. Pang‘s ability to amend his complaint did 

not hinge on whether the court granted his request for an oral 

hearing, so he has failed to advance any reason why the error

affected the outcome of his case. And for that reason, the court‘s 

erroneous denial of his hearing request was harmless error.

¶19 We note, however, that while Mr. Pang was not prejudiced 

by the district court‘s denial of his request for a hearing, the district 

court did not dismiss his complaint with prejudice. Under our 

caselaw, the ―general rule‖ is ― ̳that a dismissal under [r]ule 

12(b)(6) . . . is not final or on the merits.‘‖22 Consequently, nothing in 

our decision prevents Mr. Pang from filing a new complaint. 

II. The District Court Properly Dismissed Mr. Pang‘s

Wrongful Termination Claim

¶20 Having concluded that the denial of Mr. Pang‘s request for a 

hearing was harmless error, we now turn to his wrongful 

termination claim. In Utah, all employment relationships are 

presumed to be at-will, meaning that the employer can terminate the 

relationship at any time for any reason, or no reason at all.23 There 

 

21 See Nichols v. State, 554 P.2d 231, 232 (Utah 1976) (stating that 

after an order of dismissal, a plaintiff may ―move under [r]ules 59(e) 

or 60(b) to reopen the judgment‖ to file an amended complaint); 

Nat’l Adver. Co. v. Murray City Corp., 2006 UT App 75, ¶ 15, 131 P.3d 

872 (noting that courts have discretionary power to treat a motion to 

amend a complaint filed after dismissal ― ̳as including a rule 59(e)

motion to amend judgment or a rule 60(b) motion for relief from 

judgment‘‖ (quoting Combs v. PricewaterhouseCoopers LLP, 382 F.3d 

1196, 1205 (10th Cir. 2004) (quoting 3 JAMES W. MOORE ET AL.,

MOORE‘S FEDERAL PRACTICE § 15.12[2] & n.19 (3d ed. 2004)))). 

22 Alvarez v. Galetka, 933 P.2d 987, 991 (Utah 1997) (quoting 5A

CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE &

PROCEDURE § 1357 (2d ed. 1990)); see also Carlton v. Brown, 2014 UT 6, 

¶ 14 n.5, 323 P.3d 571 (noting that dismissal under rule 12(b)(6) 

―generally is not final or on the merits and the court normally will 

give plaintiff leave to file an amended complaint except in situations 

where it appears to a certainty that plaintiff cannot state a claim, in 

which case dismissal with prejudice is appropriate‖ (internal 

quotation marks omitted)). 

23 Hansen v. Am. Online, Inc., 2004 UT 62, ¶ 7, 96 P.3d 950.
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9

are several exceptions to the at-will employment doctrine.24 The 

exception at issue in this case applies when ―the termination of 

employment constitutes a violation of a clear and substantial public 

policy.‖25 To state a claim under the public policy exception to at-will 

employment, Mr. Pang must allege ―(i) that his employer terminated 

him; (ii) that a clear and substantial public policy existed; (iii) that 

[Mr. Pang‘s] conduct brought the policy into play; and (iv) that the 

discharge and the conduct bringing the policy into play are causally 

connected.‖26

¶21 Mr. Pang characterizes the wrongful termination issue as

whether Utah law should ever permit an in-house lawyer to bring a 

wrongful termination claim. This is a matter of first impression in 

Utah. Other state supreme courts have held that in-house counsel 

can bring wrongful termination claims, but they limit the extent to 

which the plaintiff can rely on confidential attorney-client 

communications to support them.27 Mr. Pang urges us to follow 

these decisions and argues that he can sustain such a claim for two 

reasons: (1) the Company fired him for refusing to commit an illegal 

act, and (2) he was fired for reporting illegal activity to his superiors 

under rule 1.13(b) of the Utah Rules of Professional Conduct. 

 

24 We have recognized three exceptions to at-will employment: 

―(1) there is an implied or express agreement that the employment 

may be terminated only for cause or upon satisfaction of [some] 

agreed-upon condition; (2) a statute or regulation restricts the right 

of an employer to terminate an employee under certain conditions; 

or (3) the termination of employment constitutes a violation of a 

clear and substantial public policy.‖ Id. (alteration in original)

(internal quotation marks omitted).

25 Id. (internal quotation marks omitted). In his memorandum 

opposing the Company‘s motion to dismiss, Mr. Pang argued that 

other exceptions to the at-will employment doctrine barred his 

termination. The district court rejected these arguments, and he has 

not challenged that decision on appeal.

26 Ryan v. Dan’s Food Stores, Inc., 972 P.2d 395, 404 (Utah 1998)

(footnote omitted).

27 See, e.g., Gen. Dynamics Corp. v. Superior Court, 876 P.2d 487, 

493–94, 496–504 (Cal. 1994) (explaining the California rule and 

discussing the approach taken in other jurisdictions).
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¶22 We do not reach the broader question of whether an inhouse lawyer may ever bring a wrongful termination claim, because 

even if such a claim existed in Utah, Mr. Pang has not identified a 

constitutional provision, statute, or judicial decision that amounts to 

a ―clear and substantial‖ public policy to support a claim under the 

circumstances of this case. And even if he had, rule 1.13 and other 

rules of professional conduct express strong countervailing policy 

interests that outweigh any policy Mr. Pang raises in this case. 

A. Mr. Pang’s Complaint Does Not Implicate a State Public Policy of 

Sufficient Magnitude to Qualify as an Exception to At-Will 

Employment

¶23 On appeal, Mr. Pang has conceded that he was an at-will 

employee. But he argues that his firing falls within an exception to 

the at-will employment doctrine because he was terminated in 

―violation of a clear and substantial public policy.‖28 Courts often 

use the term public policy as a broad reference to anything that ―has 

a tendency to be injurious to the public, or against the public 

good.‖29 But in the context of a wrongful termination claim, the term 

encompasses considerations that are ―much narrower than 

traditional notions of public policy.‖30 This is by design—by cabining 

the scope of the public policy exception, we ―avoid unreasonably 

eliminating employer discretion in discharging employees.‖31

Accordingly, to support a wrongful discharge claim under the public 

policy exception, Mr. Pang‘s complaint must identify a public policy 

―so clear and weighty,‖ and as to which ―the public interest is so 

strong‖ that the policy should be ―place[d] . . . beyond the reach of 

contract.‖32

¶24 To make this determination, we consider a number of 

factors: (1) whether the policy at issue is reflected in authoritative 

 

28 Hansen, 2004 UT 62, ¶ 7 (internal quotation marks omitted).

29 See Berube v. Fashion Ctr., Ltd., 771 P.2d 1033, 1043 (Utah 1989) 

(internal quotation marks omitted).

30 Rackley v. Fairview Care Ctrs., Inc., 2001 UT 32, ¶ 15, 23 P.3d 

1022.

31 Ryan, 972 P.2d at 405.

32 See Touchard v. La-Z-Boy Inc., 2006 UT 71, ¶ 13, 148 P.3d 945 

(internal quotation marks omitted); see also Hansen, 2004 UT 62, 

¶¶ 10–11; Ryan, 972 P.2d at 404–06.
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sources of state public policy,33 (2) whether the policy affects the 

public generally as opposed to the private interests of the employee 

and employer,34 and (3) whether countervailing policies outweigh 

the policy at issue.35 Below, we discuss each factor and conclude that 

rule 1.13 does not reflect a public policy of sufficient magnitude to 

qualify as an exception to the at-will employment doctrine. 

1. Mr. Pang has not raised a policy that is adequately reflected in the 

kind of sources we have recognized previously as authoritative 

expressions of Utah public policy 

¶25 First, the facts pled in Mr. Pang‘s complaint do not implicate 

a public policy defined with sufficient clarity in the types of sources 

we have recognized as authoritative expressions of Utah public 

policy. By ―sources,‖ we do not refer to particular institutions or 

public officials, but rather the laws they produce that have statewide application. In other words, we generally will not recognize a 

policy as an exception to at-will employment unless it is ―plainly 

defined‖ in authoritative sources of state law, such as ―legislative 

enactments, constitutional standards, or judicial decisions.‖36 We 

have also stated that ―our case law does not allow for administrative 

regulations alone to constitute expressions of clear public policy,‖ 

though regulations may provide some ―support to a legislatively or 

judicially created public policy.‖37

¶26 In this case, Mr. Pang relies on four categories of public 

policy exceptions we have previously recognized in our caselaw: an 

employer may not terminate someone for (1) refusing to commit an 

illegal act, (2) performing a public obligation, (3) exercising a legal 

 

33 Touchard, 2006 UT 71, ¶ 12. As we explain in more detail below, 

we have recognized federal law and the laws of other states as the 

type of authoritative sources that may reflect Utah public policy. We 

have cautioned, however, that ―[a]lthough many state and federal 

laws . . . reflect Utah public policy, and may, in fact, provide a source 

of Utah public policy, a plaintiff must establish a connection 

between‖ the federal or state law ―and the public policies of Utah‖ to 

establish an exception to the at-will rule. Peterson v. Browning, 832 

P.2d 1280, 1283 (Utah 1992). 

34 Touchard, 2006 UT 71, ¶¶ 13–14, 18. 

35 Hansen, 2004 UT 62, ¶¶ 10–11.

36 Ryan, 972 P.2d at 405.

37 Rackley, 2001 UT 32, ¶ 27 & n.8.
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12

right or privilege, or (4) reporting illegal activities to a public 

authority.38 We conclude that Mr. Pang‘s reliance on the first 

category is misplaced because the allegations in his complaint are 

legally deficient and he also failed to preserve any argument that he 

refused to commit an illegal act. Additionally, his claims under the 

other three categories depend on establishing rule 1.13 as a clear and 

substantial expression of Utah public policy, and we conclude that it 

is not.

¶27 As a general proposition, ―[p]ersons who are terminated 

from their employment because they refuse to engage in illegal 

activities that implicate clear and substantial Utah public policy 

considerations should be protected regardless of whether the 

applicable law is that of Utah, the federal government, or another 

state.‖39 But the public policy exception does not apply simply 

because an employee was fired for refusing to violate a statute. 

Rather, the ―violation of a state or federal law must contravene the

clear and substantial public policy of the state of Utah.‖40 And 

―[a]lthough many state and federal laws will reflect Utah public 

policy, and may, in fact, provide a source of Utah public policy, a 

plaintiff must establish the connection between the law violated and 

the public policies of Utah.‖41 To ―properly preserve‖ such an issue 

for appeal, ―the issue must be raised in a timely fashion,‖ it must ―be 

specifically raised,‖ and the litigant ―must introduce supporting 

evidence or relevant legal authority.‖42 Mr. Pang‘s ―refusal to 

commit an illegal act claim‖ fails for two reasons: (1) there are no 

allegations in the complaint that Mr. Pang was ever asked to commit 

an illegal act, much less that he refused such a request, and (2) he 

failed to preserve any argument based on out-of-state statutes he 

claims the company violated. 

¶28 The factual allegations in Mr. Pang‘s complaint do not 

suggest that the Company ever asked him to commit an illegal act 

prior to his termination. In both the complaint and his memorandum

opposing the motion to dismiss, Mr. Pang alleges generally that he 

was terminated for ―refusing . . . to break the law by complying with 

 

38 Touchard, 2006 UT 71, ¶ 6 (internal quotation marks omitted).

39 Peterson, 832 P.2d at 1283. 

40 Id. (emphasis added).

41 Id. 

42 O’Dea v. Olea, 2009 UT 46, ¶ 18, 217 P.3d 704 (internal quotation 

marks omitted).
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[the Company‘s] illegal activities‖ and ―refusing defendants‘ orders 

to ignore their illegalities.‖ But the specific factual allegations in the 

complaint do not support these assertions. According to the 

complaint, Mr. Pang first warned the Company in September 2011 

that it was ―violating usury laws in numerous states by charging an 

interest rate above statutory limits and not registering as a loan 

institution.‖ And he continued to ―repeatedly warn[]‖ the 

Company‘s owners that ―their out of state practice was illegal.‖ After 

making ―a final attempt to convince‖ the Company of its ―illegal 

lending practices‖ in May 2012, the company fired Mr. Pang for 

taking home documents, citing a provision of the employee 

handbook that prohibited such conduct. And according to his 

complaint, he was told ―for the first time, at the time of his 

termination‖ that ―the owners were aware of the problems but did 

not plan to correct it‖ and that he should ―ignore their noncompliance.‖ Thus, even accepting the allegations in the complaint 

as true and drawing all reasonable inferences from them in Mr. 

Pang‘s favor, the allegations are legally insufficient. Nowhere in the 

complaint does Mr. Pang allege that he was asked to break the law, 

much less that his refusal of such a request led to his termination. 

Accordingly, Mr. Pang has failed to state a claim that he was 

terminated for refusing to commit an illegal act.

¶29 In addition to the deficiency in Mr. Pang‘s pleadings, he also 

failed to preserve the argument that he was terminated for refusing 

to violate out-of-state statutes. He never presented the district court 

with the statutes he claims the company violated. They appear 

nowhere in the complaint or Mr. Pang‘s memorandum opposing the 

motion to dismiss. And he never specified before the district court 

whether these laws are criminal or civil statutes or agency 

regulations, nor does he discuss the penalties for violating them. ―In 

order to preserve an issue for appeal[,] the issue must be presented 

to the trial court in such a way that the trial court has an opportunity 

to rule on that issue.‖43 Without this information, the district court 

could not evaluate whether serious criminal penalties, hefty civil 

fines, or the nature of the violations themselves would provide a 

basis to determine that these laws reflect a clear and substantial Utah 

public policy. And as we have just noted, it was Mr. Pang‘s burden 

to furnish them.

 

43 See 438 Main Street v. Easy Heat, Inc., 2004 UT 72, ¶ 51, 99 P.3d 

801 (alteration in original) (internal quotation marks omitted).
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Opinion of the Court

14

¶30 Mr. Pang attempts to remedy this deficiency on appeal by 

citing laws in California, Florida, and Washington that he claims the 

Company violated. But because he never brought these laws to the 

district court‘s attention, we conclude that any argument based on 

the out-of-state statutes referenced in Mr. Pang‘s brief is 

unpreserved.44

¶31 Having concluded that the district court properly dismissed 

Mr. Pang‘s claim that he was terminated for refusing to commit an 

illegal act, we now turn to his claims on each of the other public 

policies we have recognized previously—exercising a legal right or 

privilege, performing a public obligation, or reporting illegal 

activities to a public authority. We begin by noting that each of these 

hinges on whether rule 1.13 of the Utah Rules of Professional 

Conduct expresses a clear and substantial public policy of sufficient 

magnitude to qualify as an exception to at-will employment. To 

make out a claim that he was improperly fired for exercising a legal 

right, Mr. Pang must do more than simply ―point to a legal right or 

privilege‖ he exercised prior to his termination. 45 He must establish 

that the legal right he claims to have exercised embodies the type of 

clear and substantial public policy we recognize as being beyond the 

reach of contract.46 Similarly, to show he was improperly fired for 

performing a public obligation, Mr. Pang must identify such an 

obligation that is founded in a clear and substantial public policy.47

 

44 See Peterson, 832 P.2d at 1283 (noting that although federal law 

and other states‘ statutes may ―reflect‖ the kind of ―Utah public 

policy‖ sufficient to support a wrongful discharge claim, ―a plaintiff 

must establish the connection between the law violated and the 

public policies of Utah‖). We also note that Mr. Pang conceded at 

oral argument that his public policy argument before the district 

court hinged entirely on rule 1.13(b).

45 See Touchard, 2006 UT 71, ¶ 9 (―Nevertheless, the fact that an 

employee can point to a legal right or privilege does not 

automatically mean that the employee has established a clear and 

substantial public policy for purposes of the exception to the at-will 

rule.‖). 

46 See id.

47 Hansen, 2004 UT 62, ¶ 10 (―An employer owes a duty to an 

employee, independent of any duty imposed by the contract of 

employment, not to exploit the employment relationship by 

demanding that an employee choose between continued 

(Continued)
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Opinion of the Court

15

In this regard, he argues that the Company fired him for reporting 

the Company‘s illegal activity to his superiors as required by rule 

1.13. He claims he had both a legal right under the rule and an 

obligation to the public to make this report. And with respect to the 

third policy—reporting illegal activity to a public authority—Mr. 

Pang relies on the fact that rule 1.13 directs in-house counsel to 

internally report such conduct. So even though he never contacted 

law enforcement, Mr. Pang argues that reporting to the Company‘s 

owners amounted to a report to law enforcement because the 

―proper authorities‖ under rule 1.13 were his superiors.

¶32 As we have discussed, a policy cannot be clear and 

substantial unless it is recognized by an authoritative source of Utah 

public policy. In other words, the policy must be ―plainly defined‖

by authoritative sources of state law, such as ―legislative enactments, 

constitutional standards, or judicial decisions.‖48 Rule 1.13 directs an 

in-house counsel to ―refer‖ any ―matter to higher authority in the 

organization‖ that ―is a violation of a legal obligation to the 

organization, or a violation of law that reasonably might be imputed 

to the organization, and that is likely to result in substantial injury to 

the organization.‖49 Mr. Pang argues that the rules of professional

conduct qualify as an authoritative source of Utah public policy 

because they are both a ―judicial decision‖ and a ―constitutional 

standard‖ under article VIII, section 4 of the Utah Constitution. That 

section states, ―The Supreme Court by rule shall govern the practice 

of law, including admission to practice of law and the conduct and 

discipline of persons admitted to practice law.‖50

¶33 We do not decide whether the rules of professional conduct 

qualify as ―judicial decisions‖ that could independently establish an 

exception to at-will employment. This is because even if some of the 

rules may reflect a public policy of sufficient magnitude to override 

at-will employment, rule 1.13, upon which Mr. Pang exclusively 

relies, clearly does not. First, the rule regulates private conduct 

between attorneys and their clients, not matters of broad public 

importance. And second, the rules of professional conduct articulate 

 

employment and violating a law or failing to perform a public 

obligation of clear and substantial public import.‖).

48 Ryan, 972 P.2d at 405.

49 UTAH R. PROF‘L CONDUCT 1.13(b).

50 UTAH CONST. art. VIII, § 4.
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Opinion of the Court

16

a strong, countervailing policy of allowing organizational clients to 

obtain the representation of their choice, and this policy outweighs 

any Mr. Pang has raised in this case.

2. Rule 1.13 regulates private attorney-client conduct, not matters of 

broad public importance

¶34 In addition to being defined by an authoritative source, clear 

and substantial public policies must be ―of overarching importance 

to the public as opposed to the parties only.‖51 Otherwise, we will 

not conclude that ―the public interest is so strong and the policy so 

clear and weighty that we should place the policy beyond the reach 

of contract.‖52 Policies that ―inure[] solely to the benefit of the 

employer and employee‖ are accordingly ―insufficient to give rise to 

a substantial and important public policy.‖53 Mr. Pang has not 

shown that the policy he identifies in rule 1.13 meets this standard 

for two reasons. First, while rule 1.13, like many of the rules of 

professional conduct, indirectly benefits the public, its primary 

purpose is to regulate private conduct between a lawyer and his or 

her client. Second, the policy Mr. Pang urges us to adopt is not in the 

same class as other policies we have recognized previously as clear 

and substantial. Accordingly, rule 1.13 does not reflect a policy of 

sufficient public importance to qualify as an exception to at-will 

employment.

¶35 It is true that when in-house attorneys report illegal conduct

to their superiors, the public reaps incidental benefits from corrective 

action the company might undertake to comply with the law. But 

rule 1.13 regulates conduct that is, at its core, a private matter 

between attorneys and their clients, not one of broad public concern. 

And in similar contexts, we have explicitly characterized an 

employee‘s duty to disclose information to an employer as ―serv[ing] 

the private interest of the employer, not the public interest.‖54

¶36 For instance, our caselaw has established that even though 

the public may reap incidental benefits when a company polices its 

own activity through hiring compliance officers, the principal 

 

51 Touchard, 2006 UT 71, ¶ 13 (internal quotation marks omitted).

52 Id. (internal quotation marks omitted).

53 Id. 

54 Fox v. MCI Commc’ns Corp., 931 P.2d 857, 861 (Utah 1997); see 

also Touchard, 2006 UT 71, ¶ 45.
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Opinion of the Court

17

benefits flow to the employer by minimizing its risk of liability.55 For 

example, in Touchard v. La-Z-Boy, a company fired a compliance 

officer hired to investigate its handling of workers‘ compensation 

claims after she told management that she believed some claims 

were being ―intentionally mismanaged.‖56 We held that a worker 

―who has been terminated for exercising his or her workers‘ 

compensation rights has a wrongful discharge cause of action under 

the public policy exception.‖57 But we concluded that no public 

policy prevented the company from firing the compliance officer.58

We noted that the compliance officer‘s complaints ―were all made in 

furtherance of her job duties‖ and that ―[w]hile the public may 

benefit when an employer chooses to create [an internal monitoring] 

position, the creation of an investigatory or supervisory position is 

likely designed to serve the employer‘s private interests by 

minimizing its risk of liability.‖59 And consequently, employers ―are 

free to disagree with the findings made by such employees and 

terminate employees who make findings with which the employer 

does not agree.‖60

¶37 Similarly, in Fox v. MCI Communications Corp., we concluded 

that an employee did not have a wrongful termination claim after 

she was fired for reporting her coworkers‘ fraudulent practice of 

classifying old customer accounts as new accounts to increase their 

pay.61 We observed that ―[a]lthough employees may have a duty to 

disclose information concerning the employer‘s business to their 

employer, that duty ordinarily serves the private interest of the 

employer, not the public interest.‖62

¶38 These cases are dispositive. Mr. Pang characterizes his inhouse counsel duties as ―a broad array of compliance assignments,‖ 

including ―ensuring that [the Company] complied with all state 

regulatory requirements.‖ But like the plaintiffs in Fox and Touchard, 

 

55 See Touchard, 2006 UT 71, ¶ 45; Fox, 931 P.2d at 859.

56 Touchard, 2006 UT 71, ¶ 43 (internal quotation marks omitted).

57 Id. ¶ 25.

58 Id. ¶ 47.

59 Id. ¶ 45.

60 Id. 

61 931 P.2d at 858–59.

62 Id. at 861.
PANG V. INT‘L DOCUMENT

Opinion of the Court

18

he does not allege that he reported the Company‘s illegal activity to 

anyone outside the organization or that rule 1.13 required him to 

contact public authorities. And the fact that Mr. Pang had an ethical 

obligation as an attorney under rule 1.13 to take the action he did 

does not distinguish his case from either Fox or Touchard; the 

employees in both cases acted on similar legal obligations to disclose 

information to their employers.63

¶39 Moreover, rule 1.13‘s plain terms characterize the attorney‘s 

duty to ―report up‖ as serving the employer‘s private interest, not an 

obligation to the public. The rule requires attorneys who suspect that 

their employer may be involved in illegal activity ―that is likely to 

result in substantial injury to the organization‖ to ―refer the matter to 

higher authority in the organization, including, if warranted by the 

circumstances, to the highest authority that can act on behalf of the 

organization.‖64 Other provisions in the rule allow disclosure of 

confidential information ―to the extent the lawyer reasonably 

believes necessary to prevent substantial injury to the organization.‖65

And it instructs lawyers representing the employer to inform 

―directors, officers, [and] employees‖ within the organization that 

the lawyer represents the employer when its ―interests are adverse to 

those of the constituents with whom the lawyer is dealing.‖66

Consequently, the duty to ―report up‖ under the rule is like the 

regular duty an employee might have to ―disclose information 

concerning the employer‘s business to [his or her] employer,‖67 a 

duty we characterized in Touchard and Fox as distinctly private.68

Accordingly, we conclude that an in-house counsel‘s duty to ―report 

up‖ illegal activity to his or her superiors is not the type of clear and 

substantial public policy that qualifies as an exception to the at-will 

employment doctrine.

¶40 This conclusion is buttressed by the significant weight and 

overarching importance of other clear and substantial public policies 

we have recognized previously, which contrast sharply with the 

private nature of the policy Mr. Pang has raised in this case. As we 

 

63 See Touchard, 2006 UT 71, ¶ 43; Fox, 931 P.2d at 861–62. 

64 UTAH R. PROF‘L CONDUCT 1.13(b) (emphasis added). 

65 Id. 1.13(c)(2) (emphasis added).

66 Id. 1.13(f).

67 Fox, 931 P.2d at 861.

68 See supra ¶¶ 36–37. 
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Opinion of the Court

19

have already discussed, Utah public policy does not allow an 

employer to fire someone for refusing to commit a crime or for 

reporting illegal activity to law enforcement.69 This is because of the 

substantial benefits such policies confer on the public at large. 

Criminal codes are ―designed to protect both society at large and 

specific individuals from antisocial acts,‖ and the law therefore 

―ought not to allow those prohibitions to be circumvented by 

employers who seek to secure an objective prohibited by the criminal 

law while avoiding a technical violation . . . because of the means 

used.‖70 Likewise, ―[t]he public policies embedded in the criminal 

laws have long been deemed of such importance that the law also 

encourages persons to report criminal activity to the public 

authorities.‖71 We have also held that an employer cannot terminate 

anyone for attempting to exercise his or her workers‘ compensation 

rights72 or for pressuring an employee to ignore state reporting 

requirements that ―ensure[] the safety of financial institutions in the 

state.‖73 

¶41 These examples share a common feature—they involve 

overarching statutory frameworks designed by the legislature to 

protect the public from bodily injury and financial harm. Mr. Pang‘s 

claim, by contrast, involves an internal report he was required to 

make as in-house counsel to minimize the regulatory risks of his 

employer‘s out-of-state lending practices. It would be one thing if 

Mr. Pang‘s complaint invoked other rules of professional conduct—

like rule 1.6—that are designed to protect others from death, 

substantial bodily injury, and serious financial harm.74 That might be 

 

69 See Fox, 931 P.2d at 861–62.

70 Id. at 860 (internal quotation marks omitted).

71 Ryan, 972 P.2d at 408 (internal quotation marks omitted).

72 See Touchard, 2006 UT 71, ¶ 25. 

73 Heslop v. Bank of Utah, 839 P.2d 828, 837 (Utah 1992).

74 See UTAH R. PROF. CONDUCT 1.6(b) (providing that lawyers may 

reveal confidential information to ―prevent reasonably certain death 

or substantial bodily harm,‖ ―to prevent the client from committing 

a crime or fraud this is reasonably certain to result in substantial 

injury to the financial interests or property of another,‖ and ―to 

prevent, mitigate or rectify substantial injury to the financial 

interests or property of another that is reasonably certain to result or 

has resulted from the client‘s commission of a crime or fraud‖).
PANG V. INT‘L DOCUMENT

Opinion of the Court

20

a different case. But here, the policy Mr. Pang asks us to recognize is 

a distinctly private matter of attorney-client relations, an issue that is 

qualitatively different than other public policies we have recognized 

previously. 

3. Any policy reflected in rule 1.13 is outweighed by other 

countervailing interests

¶42 Mr. Pang‘s claim fails for one additional reason. Even if an 

employee raises a policy that is plainly defined by the requisite 

authoritative sources and of broad importance to the public, the 

employer‘s countervailing interest in regulating its workplace 

environment may nevertheless outweigh the policy at issue and 

permit the employee‘s termination.75 And here, even if an in-house 

counsel‘s duty to ―report up‖ was clear and substantial, we are 

persuaded that other provisions of the ethical rules express 

countervailing policy interests that outweigh any Mr. Pang has 

raised in this case. 

¶43 Two such policies are protecting a client‘s right to choose 

representation and deterring illegal conduct. And the rules strike a 

delicate balance between allowing clients to secure the 

representation of their choice and guarding against a client‘s use of 

an attorney‘s services to engage in criminal activity. For example, 

rule 1.2(a) provides that lawyers must ―abide by a client‘s decisions 

concerning the objectives of representation‖ but cannot ―assist a 

client[] in conduct that the lawyer knows is criminal or fraudulent.‖76

Other provisions give these directives some teeth—rule 1.16 requires 

an attorney to ―withdraw from the representation of a client‖ if ―the 

representation will result in violation of the rules of professional 

conduct or other law.‖77 And the lawyer must also withdraw if ―the 

lawyer is discharged‖ by the client.78 Comment 4 to that rule further 

 

75 See Touchard, 2006 UT 71, ¶ 9 (―The analysis of whether the 

public policy exception applies to a particular legal right or privilege 

will frequently require a balancing of competing legitimate interests: 

the interests of the employer to regulate the workplace environment 

to promote productivity, security, and similar lawful business 

objectives, and the interests of the employees to maximize access to 

their statutory and constitutional rights within the workplace.‖

(internal quotation marks omitted)). 

76 UTAH R. PROF. CONDUCT 1.2(a), (d). 

77 Id. 1.16(a)(1).

78 Id. 1.16(a)(3).
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Opinion of the Court

21

emphasizes that the client ―has a right to discharge a lawyer at any 

time, with or without cause.‖79

¶44 Accepting Mr. Pang‘s argument would upset this careful

weighing of two important public policies—deterring crime and 

protecting a client‘s right to choose a lawyer. If organizational clients 

faced a potential wrongful termination suit every time they 

terminate an in-house lawyer with whom they disagreed, it would 

be more difficult for such clients to secure the representation of their 

choice—and there is no doubt that a client‘s right to choose a lawyer 

occupies a position of paramount importance throughout the rules of 

professional conduct. Accordingly, we conclude that countervailing 

policies outweigh the public policy Mr. Pang has raised in this 

case—that an in-house counsel who ―reports up‖ illegal activity 

under rule 1.13 should be shielded from the consequences of the atwill employment doctrine. 

¶45 In so concluding, we recognize that in-house attorneys are

situated differently than those at law firms who can withdraw from 

a case without becoming unemployed. That may well cause 

attorneys who suspect their employer is engaged in harmful, illegal 

conduct trepidation. We emphasize, however, the narrow scope of 

our decision today—we do not hold that in-house attorneys may 

never raise a wrongful termination claim, nor do we foreclose the 

possibility that an attorney fired for complying with an ethical rule, 

such as reporting criminal activity to public authorities under rule 

1.6, could ever make out such a claim.80 We hold only that an 

attorney‘s duty to ―report up‖ illegal activity to an organizational 

client‘s highest authority is not founded in the type of clear and 

substantial public policy that qualifies as an exception to the at-will 

employment doctrine. We leave these broader issues to a future case 

that squarely presents them. 

 

79 Id. cmt. 4.

80 See id. 1.6(b) (providing that lawyers may reveal confidential 

information to ―prevent reasonably certain death or substantial 

bodily harm,‖ ―to prevent the client from committing a crime or 

fraud this is reasonably certain to result in substantial injury to the 

financial interest or property of another,‖ and ―to prevent, mitigate 

or rectify substantial injury to the financial interests or property of 

another that is reasonably certain to result or has resulted from the 

client‘s commission of a crime or fraud‖).
PANG V. INT‘L DOCUMENT

Opinion of the Court

22

Conclusion

¶46 We affirm the district court‘s decision. Even though the 

court erroneously denied Mr. Pang‘s request for a hearing, the error 

was harmless. Mr. Pang fails to invoke a clear and substantial public 

policy that would have prohibited the Company from terminating 

him. The specific allegations in his complaint do not support the 

assertion that he was terminated for refusing to commit an illegal 

act, and rule 1.13(b) does not, standing alone, reflect the type of 

public policy that qualifies as an exception to the at-will employment 

rule.